China's local govt debt balance within official limit

BEIJING - China's local government debt balance stood at 17.66 trillion yuan ($2.58 trillion) by the end of August, remaining within the official limit, according to the Ministry of Finance (MOF).

The country's top legislative body has decided that the upper limit for local government debt this year should be 21 trillion yuan.

China issued local government bonds worth 883 billion yuan in August, up from the 757 billion yuan in July, with the tally for the first eight months of this year reaching 3 trillion yuan.

Over 526.6 billion yuan worth of the financing tools issued last month were special-purpose bonds for the development of public-interest projects, marking a substantial increase from 196 billion yuan in July.

The surge came after an MOF guideline was unveiled last month to accelerate the launch of special-purpose bonds by local governments to stabilize investment, expand domestic demand and strengthen weak areas.

Local authorities were told to speed up issuance in August and September to complete at least 80 percent of the annual quota by the end of this month, while the majority of the remaining 20 percent is expected to be accomplished in October.

China has made bond issuance the sole legal way for local governments to raise debt amid efforts to forestall a systemic financial crisis.